Not A Full Wave: Inside Green Street’s Senior Living Development Forecast 

Senior living stakeholders are indeed moving ahead with new projects in 2026, mostly on the high end of the senior living market. But don’t call it a full development wave.

Companies such as American House Senior Living and Brightview Senior Living are right now assembling development pipelines. At the same time, Sunrise Senior Living is embarking on a $7.5 billion, 50-community development push.

Making this possible is the fact that development fundamentals currently favor high-end projects that can charge the rent necessary for them to pencil out.

A Green Street report from September showed yields on new Class A communities in 2026 of about 8%, which translates into roughly 30% development profit margins with a capitalization rate near 6%. Communities with per-unit rent closer to average would have to earn thousands of dollars more in revenue per occupied room (RevPOR) in order to pencil out, the data showed.

As high-end projects pencil out, more companies will seek to develop them, according to Michael Stroyeck, Head of US Health Care Research at Green Street.

“Development should begin picking up,” Stroyeck told Senior Housing News. “I think we’ll see a modest acceleration in starts next year.”

But a full development wave this is not. While high-end projects pencil out in 2026, middle-market communities and those with more modest rent profiles still do not. The Green Street report’s authors wrote that, for average communities, “rents are still well below levels needed to generate a sufficient return on cost and incentivize investors to take on development risk.”

Green Street and Stroyeck have revised their senior living growth forecast lower and now expect about 1% of total senior living supply growth in 2029 and 3% of senior living supply growth in 2030.

“Development is picking up, but there are a lot of reasons that the supply floodgates aren’t going to just completely open up overnight,” he said. “You need very high-single-digits to low-double-digits type rents per month on a continuum-of-care type product, and there are a lot of markets out there that just simply can’t afford that.”

As average senior living communities remain tough to pencil, investors and developers are flocking to data centers, which carry higher development returns and lower risk relative to senior housing. There is also the fact that senior living is such an operating-intensive business, and that developers now need seasoned operators in tow to get financing for projects, among other issues acting as barriers to new development.

There also is simply more room to grow in high-end senior living. Industry data cited by Green Street’s Stroyeck showed that a median-income older adult can afford about six years of senior living on average.

As many as 40% to 45% of older adults in the median-income range for the U.S. can afford the average cost of senior housing as it is today. That will help fuel more high-end development in the months and years to come.

“There’s a large tail at that wealthy end of this industry,” Stroyek said.

For now, senior living stakeholders still are figuring out how to make middle-market projects work. Green Street and Stroyek ran the math on what an operator would need to charge to hit 30% profit margins: A community, even one with a continuum of care, would have to charge $7,000 to $8,000 per month. That is still a sizable gap over what communities can charge in primary and secondary markets across the country.

“We’re expecting mid-single-digit market rent growth over our entire forecast period through 2030. So, I think you will get there, but it’s also going to depend on what happens with construction costs, and that’s a big unknown in today’s environment,” Stroyek added. 

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